Australia’s private sector activity sent mixed signals in October, according to the S&P Global Flash PMI survey. Manufacturing PMI slipped back into contraction, falling from 51.4 to 49.7, while Services PMI rose to 53.1 from 52.4, lifting the Composite PMI modestly from 52.4 to 52.6. The data suggest that overall business activity grew at a slightly faster pace at the start of Q4, though the underlying picture remains uneven across sectors.
According to Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, the divergence between sectors was striking. Manufacturing “notably worsened,” with new orders dropping further and factories shedding jobs amid pressure on profit margins.
In contrast, services activity expanded at a solid pace, but even there, new business growth and hiring momentum slowed, and business confidence weakened.
On a positive note, price pressures continued to ease, with output price inflation falling to a five-year low. This cooling in inflation dynamics should reassure the RBA, which remains on track to pursue further monetary easing.
